14391840 Chapter 18 Modern Advanced Accountingreview Q Exr (7)

8/12/2019 14391840 Chapter 18 Modern Advanced Accountingreview Q Exr (7)

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CHAPTER 18GOVERNMENTAL ENTITIES: OTHER GOVERNMENTAL

FUNDS AND ACCOUNT GROUPS

The title of each problem is followed by the estimated time in minutes required for completion and by a difficultyrating. The time estimates are applicable for students using the partially filled-in working papers.

Pr. 181 Ridge City(20 minutes, easy)

Journal entries for a governmental entity's general capital assets account group.

Pr. 182 Town of Dilbey(30 minutes, medium)

Financial statements for a governmental entity's capital projects fund at end of its first year ofoperations.

Pr. 183 Town of Logan(30 minutes, medium)

Journal entries for two construction projects in capital projects fund for project financed by generalobligation bonds and in special revenue fund for project financed by special assessments bonds ofa governmental entity.

Pr. 184 Webster Village(30 minutes, medium)

!iven journal entries for a governmental entity general fund prepare journal entries for other

affected funds and account groups.Pr. 185 Calabash County(30 minutes, medium)

"repare journal entries for funds and account groups for four transactions or events of agovernmental entity.

Pr. 186 City of Arlette (30 minutes, medium)

Journal entries for affected funds and account groups for a capital lease of a governmental entity.

Pr. 187 City of Ordway (40 minutes, medium)

"reparation of journal entries and balance sheet for capital projects fund of a governmental entity.

Pr. 188 City of Wilmont(40 minutes, medium)

Journal entries including closing entries #e$planations omitted% for capital projects fund of agovernmental entity.

Pr. 189 Angelus School District(50 minutes, strong)Journal entries for transactions and events of general fund capital projects fund general capitalassets account group and general long-term debt account group of a governmental entity.

ANSWERS TO REVIEW QUESTIONS

&. Fees for rubbish collection state gasoline ta$es and traffic violation fines and proceeds of specialassessments #including related bonds% are among the ta$es or fees that often are accounted for inspecial revenue funds of a governmental entity.

. The Town of !roman !eneral Fund credits the ($penditures ledger account because the amountreceivable from the )pecial *evenue Fund is a reimbursement of !eneral Fund e$penditures.

+. "roceeds of general obligation bonds issued at face amount by a governmental entity are accounted

for as other financing sources of a capital projects fund because the proceeds are not revenues ofthat fund.

,. separate debt service fund is not established for every issue of general obligation bonds of agovernmental entity. n the absence of legal requirements for a debt service fund or of a formalplan for accumulation of a sinking fund a debt service fund may be unnecessary.

The McGraw-Hill Companies, Inc., 2006

+ Modern Advanced Accountin, !0"e


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/. The probable e$planation of the illustrated journal entry is to record payment of cash to a banktrust department acting as fiscal agent for the payment of bond principal and interest.

0. The recognition of depreciation of plant assets is appropriate for all assets of a governmentalentity's general capital assets account group e$cept for certain infrastructure and ine$haustible#land and certain works of art% assets.

1. The nvestment in !eneral 2apital ssets from !ifts ledger account is credited for the current fairvalue of plant assets donated to a governmental entity for its general use as opposed to use by aproprietary fund or a trust fund.

3. balance sheet is not issued for a governmental entity's general capital assets account group

because an account group is not a und.4. The journal entry in the 5illage of 6arvell !eneral 7ong-Term 8ebt ccount !roup is incorrect9

mount vailable in 8ebt )ervice Fund should be de!ited,and mount to :e "rovided should be"redited.

&;. For a capital lease for fire engines a governmental entity's general fund records the appropriationsand e$penditures for the lease payments9 the general long-term debt account group records theliability under the capital lease9 and the general capital assets account group records the leasedassets under the capital lease and the related depreciation.

&&. liability for special assessment bonds is recorded in a governmental entity's general long-termdebt account group if the governmental entity is obligated in some manner for the payment of thebonds if the assessed property owners default.

SOLUTIONS TO EXERCISES#$. 181 &. a 4. d

. # &;. #

+. # &&. d

,. c &. d

/. a &+. c

0. a &,. c

1. # &/. d

3. # &0. #

#$. 182 Journal entries for 2ounty of 7archmont )pecial *evenue Fund July ;;/,3;;;;$ ;.;&/% 1;;

*evenues ,13;;To accrue property ta$es billed and to provide for estimateduncollectible portion.

2ash &,1;;

Ta$es *eceivable2urrent &,1;;To record collection of property ta$es during July ;;/

#$. 183 2omputation of present value of 2ity of !arbo 0? serial bonds July & ;;/;;;;; A >0;;;;% $ ;.4/40B%C >,;1,&July & ;;, payment @#>;;;;; A >,3;;;% $ ;.3/1++4B%C

&0;July & ;;/ payment @#>;;;;; A >+0;;;% $ ;.14+3+B%C &31+,,July & ;;0 payment @#>;;;;; A >,;;;% $ ;.1+/;+;B%C &0,0,1July & ;;1 payment @#>;;;;; A >&;;;% $ ;.03;/3+B%C &,,3,

"resent value of 0? serial bonds >4,40+0BFrom present value tables.

#$. 184 Journal entry for 2ounty of "inecrest 2apital "rojects Fund July & ;;//;;;; $ ;.;3 $ % ;;;

2ash with Fiscal gent /;;;

To record fiscal agent's payment of bond principal and interest.

#$. 186 Journal entry in :ucolic Township !eneral Fund 6ar. &3 ;;0

nvestment in !eneral 2apital ssets from 2apital "rojectsFunds 4/;;;;

To record construction work in progress on town hall.

#$. 1810 Journal entry for Iays 2ity !eneral 2apital ssets ccount !roup&;;;;; must be made on an

issue of >&;;;;;; face amount of ;-year general obligation term bonds #>&;;;;;; $ ;.;0 $ ;P >&;;;;;%. Thus inclusion of the obligation for unmatured interest on general obligation termand serial bonds outstanding might well be appropriate for the accounting records of the generallong-term debt account group instead of being relegated to a note to financial statements of theappropriate debt service fund.


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%ase 185 The engagement manager of the 2" firm that audited the 2ity of 6artinburg financialstatements should e$plain to the 6artinburg 2ity 2ouncil that the 2linic 2apital "rojects Fundhas insufficient resources to pay for the fund's present and potential liabilities. The negativebalance of the =nreserved and =ndesignated Fund :alance ledger account measures the

appro$imate shortfall. The 2ity 2ouncil will have to authoriQeperhaps through a

supplemental appropriationa subsidy from the 2ity of 6artinburg !eneral Fund to enable

the construction of the clinic to be completed.


$olutions Manual, Chapter !% +3


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; 6inutes 6ediumRidge City P! 18"1

Ridge City Ge#e$% C$&it$% A''et' A(()*#t G)*&

+)*#$% E#tie'

20 05

Oct 31 Machinery and Equipment 2 0 0 0 0

Investment in General Capital Assets frm

General !und "evenues 2 0 0 0 0

# recrd acquisitin f equipment $y General !und%

&ec% 10 'and 1 0 0 0 0 0

(uildin)s 5 0 0 0 0 0

Investment in General Capital Assets frm Gifts * 0 0 0 0 0

# recrd+ at current fair value+ private citi,en-s )ift f

land and a $uildin)%

20 0*

.une 30 Cnstructin in /r)ress 0 0 0 0


Capital /rects !unds 0 0 0 0

# recrd cnstructin r4 in pr)ress%

30 Investment in General Capital Assets frm General

!und "evenues * 0 0 0 0

Investment in General Capital Assets frm Capital

/rects !unds 1 0 0 0 0

Investment in General Capital Assets frm Gifts 0 0 0 0

Accumulated &epreciatin f (uildin)s 2 5 0 0 0 0

Accumulated &epreciatin f Machinery and

Equipment 0 0 0 0

# rec)ni,e depreciatin f $uildin)s and machinery

and equipment%

30 Investment in General Capital Assets frm Capital /rects !unds 6 5 0 0 0 0

Accumulated &epreciatin f Infrastructure 6 5 0 0 0 0

# rec)ni,e depreciatin f infrastructure%


+4 Modern Advanced Accountin, !0"e


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+; 6inutes 6ediumT),# )- Di%.ey P! 18"/

T),# )- Di%.ey C$&it$% P)0e(t' F*#d

St$tee#t )- Re2e#*e'3 E4&e#dit*e'3 $#d C5$#ge' i# F*#d 6$%$#(e

F) 7e$ E#ded +*#e 93 /99

"evenues7

Miscellaneus 8 3 0 0 0 0

E9penditures7

Cnstructin cntracts 8 5 5 2 0 0

En)ineerin) and ther 1 6 0 6 0 0

#tal e9penditures 8 5 * 0 0 0

E9cess :deficiency; f revenues ver e9penditures 8: 2 * 0 0 0 ;

Other financin) surces :uses;7

!ace amunt f )eneral $li)atin $nds 81 0 0 0 0 0 0

&iscunt n )eneral $li)atin $nds : 6 * ;

E9cess f revenues and ther surces ver

e9penditures and ther uses :fund $alance+ end f year; 8 1 5 0 3 *

T),# )- Di%.ey C$&it$% P)0e(t' F*#d

6$%$#(e S5eet

+*#e 93 /99

A''et'

Cash 8 2 * 0 3 *

Li$.i%itie' ; F*#d 6$%$#(e

'ia$ilities7


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+; 6inutes 6ediumT),# )- L)g$# P! 18"

a. T),# )- L)g$# T),# H$%% C$&it$% P)0e(t' F*#d

+)*#$% E#tie'

F) 7e$ E#ded +*#e 93 /99

Cash * 0 0 0 0 0

Other !inancin) ?urces * 0 0 0 0 0

# recrd issuance+ at face amunt+ f 20@year+

)eneral $li)atin term $nds due .uly 1+ 2025+

interest paya$le .an% 1 and .uly 1%

Encum$rances 5 3 0 2 0 0

!und (alance "eserved fr Encum$rances 5 3 0 2 0 0

# recrd encum$rances fr the year%

E9penditures 3 6 0 * 0 0


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T),# )- L)g$#


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+; 6inutes 6ediumWe.'te Vi%%i$ge P! 18"=

We.'te Vi%%$ge C$&it$% P)0e(t' F*#d

+)*#$% E#ty

20 05

.uly 3 "eceiva$le frm General !und 1 5 0 0 0

Other !inancin) ?urcesB#ransfers In 1 5 0 0 0

# recrd receiva$le frm General !und fr

transfer t ma4e up cash deficiency%

We.'te Vi%%$ge De.t Se2i(e F*#d

+)*#$% E#ty

20 05

Au) 31 Cash 2 1 0 0 0 0

Other !inancin) ?urcesB#ransfers In 2 1 0 0 0 0

# recrd receipt f cash frm General !und fr

payment f term $nd principal :8200+000; and interest

:810+000; maturin) n Au)ust 31+ 2005%

We.'te Vi%%$ge Ge#e$% L)#g@Te De.t A(()*#t G)*&

+)*#$% E#ty

20 05

Au) 31 Amunt Availa$le in &e$t ?ervice !und 2 0 0 0 0 0

Amunt t (e /rvided 2 0 0 0 0 0

# recrd amunt received $y &e$t ?ervice !und

frm General !und fr retirement f principal f

)eneral $li)atin term $nds%

We.'te Vi%%$ge Ge#e$% C$&it$% A''et' A(()*#t G)*&

+)*#$% E#tie'

20 05

v 30 Machinery and Equipment * 0 0 0 0


General !und "evenues * 0 0 0 0

# recrd acquisitin f cmputer $y General !und%

20 0*

.une 30 Investment in General Capital Assets frm General!und "evenues :8*0+000 9 1H5 9 H12; 0 0 0

Accumulated &epreciatin f Machinery and

Equipment 0 0 0

# rec)ni,e depreciatin f cmputer fr seven

mnths ended .une 30+ 200*%


,+ Modern Advanced Accountin, !0"e


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We.'te Vi%%$ge


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+; 6inutes 6ediumC$%$.$'5 C)*#ty P! 18"

C$%$.$'5 C)*#ty G$')%i#e T$4 S&e(i$% Re2e#*e F*#d

+)*#$% E#ty

20 05

.uly 1 Estimated "evenues * 0 0 0 0

Apprpriatins * 0 0 0 0 0

(ud)etary !und (alance 0 0 0 0

# recrd annual $ud)et adpted fr !iscal Jear 200*%

C$%$.$'5 C)*#ty C$&it$% P)0e(t' F*#d

+)*#$% E#ty

20 05

.uly 5 Encum$rances 5 0 0 0 0 0 0

!und (alance "eserved fr Encum$rances 5 0 0 0 0 0 0

# recrd e9ecutin f cntract fr cnstructin f

ne pu$lic li$rary%

C$%$.$'5 C)*#ty S&e(i$% A''e''e#t S&e(i$% Re2e#*e F*#d

+)*#$% E#ty

20 05

Au) 1 ?pecial Assessments "eceiva$leBCurrent

:800+000 5; 6 0 0 0 0

?pecial Assessments "eceiva$leB&eferred 3 2 0 0 0 0

"evenue 6 0 0 0 0

&eferred "evenues 3 2 0 0 0 0

# recrd special assessment n prperty ners f

rth ?u$divisin fr cnstructin f sideal4sK

special assessments receiva$le and related revenueapplica$le t year endin) .une 30+ 200*+ are current+

and the $alance is deferred%

C$%$.$'5 C)*#ty Ge#e$% F*#d

+)*#$% E#tie'

20 05

?ept 1 E9penditures 2 0 0 0 0

Cash :r


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C$%$.$'5 C)*#ty


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+; 6inutes 6ediumCity )- A%ette P! 18"

City )- A%ette Ge#e$% F*#d

+)*#$% E#tie'

20 05

.uly 1 E9penditures 3 0 0 0

Cash 3 0 0 0

# recrd first lease payment n three@year capital

lease fr cmputer%

20 0*

.uly 1 E9penditures :8510 interest 82+0 principal; 3 0 0 0

Cash 3 0 0 0

# recrd secnd lease payment n three@year capital

lease fr cmputer%

20 0

.uly 1 E9penditures :82*6 interest 82+1 principal; 3 0 0 0

Cash 3 0 0 0

# recrd third lease payment n three@year capital

lease fr cmputer%

20 06

.une 30 E9penditures :81 interest 85 principal; 5 0 0

Cash 5 0 0

# recrd payment f $ar)ain@purchase ptin under

capital lease fr cmputer%

City )- A%ette Ge#e$% L)#g@Te De.t A(()*#t G)*&

+)*#$% E#tie'

20 05

.uly 1 Amunt t (e /rvided D:83+000 9 2%5111;

:8500 9 0%2163;F 6 * * 3

'ia$ility under Capital 'ease :net; 6 * * 3

# recrd lia$ility under three@year capital lease fr

cmputer%

1 'ia$ility under Capital 'ease :net; 3 0 0 0

Amunt t (e /rvided 3 0 0 0

# recrd General !und payment f first lease

payment n three@year capital lease fr cmputer%

20 0*

.uly 1 'ia$ility under Capital 'ease :net; 2 0Amunt t (e /rvided 2 0

# recrd General !und payment f secnd lease

payment n three@year capital lease fr cmputer%


17/23

City )- A%ette


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City )- Od,$y P! 18"B

a. City )- Od,$y Li.$y C$&it$% P)0e(t' F*#d

+)*#$% E#tie'

F) 7e$ E#ded +*#e 93 /99B

20 0*

.uly 1 Cash 5 1 0 0 0 0 0

Other !inancin) ?urces7 (nds Issued 5 0 0 0 0 0 0

Other !inancin) ?urces7 /remium n (nds

Issued 1 0 0 0 0 0

# recrd issuance f 30@year+ + 85+000+000 faceamunt )eneral $li)atin term $nds due .uly 1+ 203*

interest paya$le .une 30 and &ecem$er 31%

3 Investments 0 0 0 0 0

Cash 0 0 0 0 0

# recrd acquisitin f 8+00+000 face amunt f

shrt@term ntes%

5 Encum$rances 6 0 0 0 0

!und (alance "eserved fr Encum$rances 6 0 0 0 0

# recrd cnstructin@type cntract ith /remier

Cnstructin Cmpany%

20 0

.an 15 Cash 3 0 0 0 0 0

Investments 3 0 0 0 0 0 0

/aya$le t 'i$rary &e$t ?ervice !und 0 0 0 0

# recrd receipt f cash fr matured shrt@term ntes%

15 /aya$le t 'i$rary &e$t ?ervice !und 0 0 0 0

Cash 0 0 0 0

# recrd transfer f cash t 'i$rary &e$t ?ervice

!und%

20 E9penditures 3 0 0 0 0 0 0


19/23

City )- Od,$y Li.$y C$&it$% P)0e(t F*#d

+)*#$% E#tie'


20/23

,; 6inutes 6ediumCity )- Wi%)#t P! 18"8

City )- Wi%)#t Ci2i( Ce#te C$&it$% P)0e(t' F*#d+)*#$% E#tie'

F) 7e$ E#ded +*#e 93 /99

:1; "eceiva$le frm ?tate Gvernment 5 0 0 0 0 0 0

"evenue 5 0 0 0 0 0 0

Cash 5 0 0 0 0 0

/aya$le t General !und 5 0 0 0 0 0

:2; E9penditures 3 2 0 0 0 0

Cash 3 2 0 0 0 0

:3; Cash D:810+000+000 9 0%112; :800+000 9

16%0156;F 0 2

Other !inancin) =ses7 &iscunt n (nds Issued 2 0 0 *

Other !inancin) ?urces7 (nds Issued 10 0 0 0 0 0 0

:; Encum$rances 12 0 0 0 0 0 0

!und (alance "eserved fr Encum$rances 12 0 0 0 0 0 0

:5; Encum$rances 5 5 0 0 0

!und (alance "eserved fr Encum$rances 5 5 0 0 0

:*; Cash 2 5 0 0 0 0 0

"eceiva$le frm ?tate Gvernment 2 5 0 0 0 0 0

:; E9penditures 5 1 0 0 0


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/; 6inutes )trongA#ge%*' S(5))% Di'ti(t P! 18">

a. A#ge%*' S(5))% Di'ti(t Ge#e$% F*#d

+)*#$% E#tie'

20 05

.an 1 Estimated "evenues :8112+000 8+000; 1 1 * 0 0 0

(ud)etary !und (alance :8126+000 L 82+660; 5 5 1 2 0

Apprpriatins :8120+000 81+120 850+000; 1 1 1 2 0

# recrd annual $ud)et adpted fr 2005%

1 #a9es "eceiva$leBCurrent 1 1 2 0 0 0

"evenues 1 1 2 0 0 0

# accrue prperty ta9es $illed%

!e$ 26 Cash 5 0 0

E9penditures 5 0 0

#a9es "eceiva$leBCurrent :8+500 0%; 5 0 0 0 0

# recrd cllectins f prperty ta9es received frm

cunty treasurer+ net f 1 fee%

Apr 1 Cash :r "eceiva$le frm Capital /rects !und; 2 6 5 0

"evenues :81+000+000 9 0%01; 1 0 0 0 0

E9penditures :81+000+000 9 0%05 9 3H12; 1 6 5 0

# recrd receipt f $nd premium and accrued

interest frm Capital /rects !und%

May 1 Cash 3 0 0 0

"evenues 3 0 0 0

# recrd receipt f interest n shrt@term investments

:8100+000 9 0%0* 9 N 83+000;%

.uly 1 E9penditures 3 5 0 0

Cash 3 5 0 0

# recrd payment f interest n )eneral $li)atin$nds :81+000+000 9 0%05 9 N 83+500;%

Au) 31 Cash 5 0 0

E9penditures * 0 0

#a9es "eceiva$leBCurrent :85+00 0%; * 0 0 0 0

# recrd cllectins f prperty ta9es received frm

cunty treasurer+ net f 1 fee%

v 1 Cash 3 0 0 0

"evenues 3 0 0 0

# recrd receipt f interest n temprary investments

:8100+000 9 0%0* 9 N 83+000;%

&ec 31 E9penditures 1 1 5 0 0 0

Cash 1 1 5 0 0 0

# recrd peratin) e9penditures paid durin) year%


$olutions Manual, Chapter !% /


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14391840 Chapter 18 Modern Advanced Accountingreview Q Exr (7)

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Transcript of 14391840 Chapter 18 Modern Advanced Accountingreview Q Exr (7)